U.S. biotechs, pharmas can learn from China to accelerate drug development

The recent experience of Chinese biotech companies in developing their own drug candidates and inking deals with larger pharma companies, including those that are U.S.-based, provide an example for U.S. biotechs and pharmas to follow.

Speaking during a session at the 2025 BIO Convention in Boston on Monday, Tim Opler, a managing director in Stifel’s Global Healthcare Group, said that while large pharmas five years ago saw Chinese biotechs as underdogs, that is no longer the case.

He noted that it is possible for U.S. pharmas and biotechs to gain access to a phase 2/3 candidate from a Chinese company at a fraction of what a similar asset would cost from a U.S. company.

Opler cited Pfizer’s (NYSE:PFE) May licensing deal with China’s 3SBio for a bispecific antibody targeting PD-1 and VEGF for $1.25B upfront, and Summit Therapeutics’ (SMMT) 2022 licensing deal with China’s Akeso for their cancer biologic, ivonescimab, that was worth $500M upfront as examples. Ivonescimab is seen as a potential successor to Merck’s (NYSE:MRK) Keytruda (pembrolizumab).

“Chinese assets are affordable and good quality,” he noted.

Opler added that there are several reasons for the success of Chinese biotechs. The first is the country has a cheap system for outsourcing molecule development, so candidates are able to enter the clinic much more quickly compared to the U.S. He added that management teams work really hard, citing the story of one Chinese biotech exec who works in an office that had a bed in it since he spends many nights sleeping overnight there. Finally, labor costs are dramatically lower in China.

Companies have to “learn to better compete for less….Companies need to become more efficient in order to survive.”

Most large U.S. pharmaceutical companies have their own R&D operations in China. For example, Pfizer has had a center in Shanghai since 2005 and just opened up a new location in Beijing in March. In November 2024, Pfizer said it would invest $1B in R&D in China over the next five years.

Pfizer SVP, Worldwide Business Development Deborah Baron, who was part of the same panel Opler was on, said that when the pharma giant is looking at potential deals, it is looking for assets or companies that address unmet medical needs. She added that from a therapeutic area standpoint, Pfizer is focused on oncology, vaccines, cardiovascular, metabolic, and inflammation.

She added she also pays attention to who has been investing in the company and how “seasoned” a company’s management team is.